Paper losses #finance #investments

We don’t actually make a profit or a loss on shares until we sell. When a share price rises or falls we make so-called paper losses or paper gains. In my case, the gains and losses are recorded on a spreadsheet. The loss I made on Carillion recently was a real loss because the company went into liquidation but most losses are paper losses and the share often recovers. Immupharma plunged over 70% this week and that wiped over 20% off my portfolio and far more from my expected return. It was a major blow, so what can I do now? I just have to see it in context and do more research. The results of their pivotal phase three trial weren’t as good as expected and the price plunged by over £1.00 a share. I have read the results of the trial and I think, as someone who suffers from lupus, that the drug still has a lot of potentials and so does the company. The share price has recovered a little since Tuesday.

Paper losses

The gains on paper can look really encouraging and the paper losses at first glance look like a disaster but in the long-term, all my AIM shares have a good chance of soaring yet again making paper gains. The big question is when should I sell and turn those gains into real gains. In the case of Immupharma, I thought they would go to around 200 in the short-term and I would have sold at that. Instead, they crashed back to 25 but have since recovered at are now at 40.6. That’s a huge paper loss but there is still huge potential.

Potential

I’m looking for potential and Verona Pharma although volatile like Immupharma also has great potential. The share price is at 150 but has been as high as 300 on a little good news. FDA approval of their drug could send the share price to 400 or higher.

Solo Oil is a different company altogether and in a different sector but it also has potential. They have a number of assets that could come good but essentially in the short-term, they need to resume pumping gas in Tanzania or strike oil or maybe hit oil at the Horse Hill play.

Portfolio

The rest of my portfolio is a sea of red number except for Lloyd’s banking group. The AA is improving now since they cut the dividend. They seem to have noticed the cause of Carillion’s demise. They can now generate cash and invest. The AA really needs to invest in better marketing. Debenhams has a lot of problems but is trying to turn things around. The share price is hovering around 24 and that is a fraction of what it was, so in theory, it is underpriced. They need to get online sales going and their joint venture might do that.

Premier Foods is another company trying to turn things around. It is a major food company but looking at some of its products on supermarket shelves, they don’t seem to be selling quickly enough. Mr Kipling products are always discounted or half price. Premier Foods products are no longer premier products. They need to improve the product, the packaging, the branding and the advertising.

That’s it for this week. If you’re making major paper losses like me, don’t panic. I’m not going to starve and my life won’t alter dramatically. I’ll just have to wait a while to buy that expensive camera I have my eye on!